Air Board passes two major building blocks in state's effort to fight global warming

EL MONTE, Calif -The Air Resources Board set in place today two important building blocks in California's
fight to slow the impacts of global warming when it approved a greenhouse gas emissions limit for 2020 and adopted
regulations requiring mandatory reporting of greenhouse gases for large facilities.

Both items were required under AB32, California's landmark climate change legislation. AB32, also known as The
Global Warming Solutions Act of 2006, was signed by Governor Schwarzenegger in September 2006 and requires that
California reduce its greenhouse gas emissions to 1990 levels by 2020. The 1990 Greenhouse Gas Emissions Level
establishes the actual number of tons of emissions that California is required to reach. The Board also adopted
the state's first-ever rules and requirements for the largest facilities in California to report their annual greenhouse
gas emissions.

"The items the Board adopted today are a clear demonstration that we continue to meet our statutory deadlines
under AB32. Thanks to meticulous work by ARB staff, we now have a rock-solid calculation of the total number of
tons of greenhouse gases emitted by California in 1990 - and a firm goal for us to reach by 2020," said Chairman
Mary Nichols. "The mandatory reporting requirements are a crucial part of the state's efforts to reach that
goal. We are now giving businesses and industry the clear guidance they need to calculate and report their greenhouse
gas emissions for their largest facilities."

1990 Greenhouse Gas Emissions Inventory-2020 Emissions Limit

California's ARB staff has spent the past year assembling an inventory of the state's 1990 emissions using a variety
of data sources, including inputs related to fuel combustion, industrial processes, and agricultural practices.
That figure is 427 million metric tons of carbon dioxide equivalent. Preliminary estimates indicate that 2020 emission
projections could be 600 million tons of carbon dioxide equivalent if no actions are taken to reduce greenhouse
gases-the so-called 'business-as-usual' scenario. This means that California must prevent 173 million tons of carbon
dioxide equivalent from being emitted by 2020 in order to meet the 1990 level as required by AB32.

ARB staff used accepted international guidance to develop the inventory and calculated the total emissions of
six greenhouse gases including carbon dioxide (by far the largest single gas with 89 percent of the total), methane,
nitrous oxide, and three gases used mainly in industrial applications. Each greenhouse gas has a different global
warming potential. A ton of methane, for example, has 21 times the global warming potential as a ton of carbon
dioxide. The final figure of 427 million metric tons of carbon dioxide was arrived at by giving each gas its global
warming potential weight., (By comparison, 200,000 passenger cars driven for a full year produce about one million
tons of carbon dioxide.)

ARB staff reviewed more than 10,000 separate calculations to arrive at the total, and efforts included an eight-month
review of a previous inventory for 1990 levels developed by the California Energy Commission in 2006. Major sectors
such as transportation, electrical power, industry, petroleum refining, agriculture and forestry included 270 sub-categories,
each with its own data sources and subject-specific calculations.

The inventory revealed that in 1990 transportation, with 35 percent of the state's total emissions, was the
largest single sector, followed by industrial emissions, 24 percent; imported electricity, 14 percent; in-state
electricity generation, 11 percent; residential use, 7 percent; agriculture, 5 percent; and commercial uses with
3 percent.

A series of early actions, tailpipe regulations and the development of fuels with less carbon in them are estimated
to provide reductions totaling 66 million tons of carbon dioxide equivalent. ARB staff are currently developing
a Scoping Plan to develop programs and measures to address the remaining 107 million tons of carbon dioxide equivalent
in order to reach the total of 173 million tons by 2020. That plan will be submitted to the Board in November,
2008.

Mandatory Reporting Requirements

The mandatory reporting regulations require annual reporting from the largest facilities in the state, accounting
for 94 percent of greenhouse gas emissions from industrial and commercial stationary sources in California. (Transportation
sources, which account for 38 percent of California's total greenhouse gas emissions are not covered by these regulations
but will continue to be tracked through existing means.) The standards and approaches to reporting were developed
in close consultation with the California Climate Action Registry, as required by the law. The stakeholder process
included five public workshops and 15 technical workgroup meetings, as well as numerous other meetings and teleconferences
and extensive coordination with other state agencies.

There are about 800 separate sources that fall under the new reporting rules and include electricity generating
facilities, electricity retail providers and power marketers, oil refineries, hydrogen plants, cement plants, cogeneration
facilities, and industrial sources that emit over 25,000 tons of carbon dioxide each year from on-site stationary
source combustions such as large furnaces. This last category includes a diverse range of facilities such as food
processing, glass container manufacturers, oil and gas production and mineral processing. Backup generators, schools
and hospitals are excluded from the requirements.

Affected facilities will begin tracking their emissions in 2008, to be reported beginning in 2009 with a phase-in
process to allow facilities to develop reporting systems and train personnel in data collection. Emissions for
2008 may be based on best available emission data. Beginning in 2010, however, emissions reports will be more rigorous
and will be subject to third-party verification. Verification will take place annually or every three years, depending
on the type of facility. ARB is also developing a training and accreditation plan for third-party verifiers.

The Air Resources Board is a department of the California Environmental Protection
Agency. ARB's mission is to promote and protect public health, welfare, and ecological resources through effective
reduction of air pollutants while recognizing and considering effects on the economy. The ARB oversees all air
pollution control efforts in California to attain and maintain health based air quality standards.